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How to Choose a Travel Rewards Credit Card

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If you’re a frequent flier or someone who’s looking for a way to lower the cost of annual vacations, a travel rewards card may fit well in your wallet. Travel rewards cards give you miles or points based on the number of miles you fly or the amount you spend on travel. Cards that reward in points typically allow you to redeem your rewards for more than just travel. Here are a few things to keep in mind when you’re picking a travel rewards credit card.

Flying Frequency

The amount of time you spend in airplanes should definitely be part of your choice in travel rewards cards, especially since you earn more rewards the more you travel.

Many of the best travel rewards credit cards come with an annual fee, some are extremely high, e.g. $500 for the Citi ThankYou Prestige, and others are moderate, around $60 for the Escape By Discover.

If you’re considering a card with an annual fee, the travel benefits, discounts or bonuses, should compensate. Don’t pay several hundred dollars in annual fee and never get a similar discount on tickets each year. Avoid picking the most expensive card if don't fly often enough to reap the benefits.

Cards without an annual fee do exist. Unfortunately, these fee-free cards often pay rewards at a lower rate than those that do have the annual fee.

Get Rewards on What You Buy

Travel rewards cards often give double or triple rewards on travel purchases, one mile on everything else. The PenFed Premium Travel Rewards American Express Card, for example, pays 5 points per dollar on airline purchases. The US Airways Premier World MasterCard pays 2 miles per dollar on US Airways purchases. The United Mileage Plus Visa Select Card pays 3 miles per dollar on United ticket purchases, 2 miles per dollar on gas, home improvement, grocery, and dining purchases.

Airline specific cards will pay more miles on ticket purchases for that airline, while non-airline-specific cards pay miles on all travel purchases. If you prefer a certain airline, choose the credit card for that airline.

Signup Bonus

Many travel rewards credit cards pay signup bonuses. Some only require you to make a single purchase within a certain timeframe of opening the card. Others require you to purchase a certain dollar amount within a certain timeframe. But, don’t let a great signup bonus lead you to pick a bad travel credit card. The American Express Platinum Card, for example, pays a whopping 50,000 bonus points if you spend just $1,000 in the first three months. The card, which has some amazing perks, comes with a $450 annual fee.

Flexibility in Redemptions

Airline specific travel rewards credit cards will pay the best rewards on purchases related to their airline. You’ll get the best redemption rates for airline specific reward redemptions. However, if you need to fly outside the airline, for example on connecting flights, your reward conversion rates may go down and you’ll need more miles for flights.

There are lots of credit cards that pay points or miles for on travel, but don’t tie you to a certain airline. These are often better for people who aren’t necessarily loyal to a certain airline. These cards give you more flexibility in using your rewards than those that are airline-specific.

If you’re not sure whether you’ll use your rewards for travel, consider a card that lets you use your rewards for other things, like cashback or merchandise. That way your rewards won’t go to waste if you don’t take a trip.

Consider Restrictions

Beware restrictions on how you can accumulate or redeem your rewards. Some may have minimum redemption amounts, maximum accumulation amounts, or may have blackout dates on certain flights. Some rewards cards may promise no blackout dates, but may instead require a greater number of rewards for flights that are more in demand, e.g. around holidays and major events. Also watch out for rewards that expire if they’re not used within a certain amount of time.

APRs and Fees

Don’t forget to consider the APRs on the card. Many travel rewards credit cards come with introductory APRs that give you a certain number of months of no interest on purchases or balance transfers or both. Pay close attention to the regular APR, though, some are high. Paying interest on a rewards credit card, especially one with a high balance, can diminish or negate the value of the rewards you receive.

Other Perks

Free or discounted flights aren’t the only benefits to look for with a travel rewards cards. Some also offer complimentary flight or hotel upgrades, baggage fee waivers, priority boarding, and complimentary or discounted club day passes.

Making the Choice

Review credit card offers closely. Of course, the pricing information is important, as it is with any other credit card. Also, make sure you thoroughly read the rewards terms and conditions to understand what you’re getting when you sign up for the credit card.

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